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31 August 2007

Spain property prices rise fastest

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by Kay Mitchell

Spain property prices rise fastest

Research by mortgage lender Halifax has established that property prices in Spain have risen at a quicker rate than anywhere in Europe over the last 5 years, even outperforming a strong UK market. The cost of a Spanish property doubled between 2001 and 2006 – soaring by 57% in the last 2 years.

Over the same 5-year period, prices in the UK were up 90%, more than double the 40% average across the Europe overall. The strength of the Spanish economy and low interest rates have driven Spain’s housing market.

Spain also has a higher percentage of homeowners than any other eurozone nation. 82% of its inhabitants are owner-occupiers, compared with 55% in the Netherlands and 45% in Germany. In the UK, the owner-occupier rate is 70%.

Portugal and Austria recorded the lowest price inflation over 5 years, with prices increasing by 7% and 6% respectively, in Germany prices fell by 5%.

However, in spite of the 100% increase in prices over the past 5 years, Spain is not the most expensive eurozone country in which to buy a house, that goes to Ireland, where the average house price reached £209,300 in 2006. This compared with an average of £190,900 in the Netherlands, £187,100 in the UK and £150,200 in Spain.

Finland has the cheapest properties in the eurozone where the average house price was £92,300.

A spokesperson for the Halifax commented that Ireland’s strong economy, immigration and the creation of new homes are responsible for Ireland’s property prices. In addition, Ireland house prices are now equal to those in the south-east of England, with Dublin as expensive to live in as London.

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